THE CRAZIES ARE COMING: The crackpots, crazies and former criminals are coming for Hillary Clinton; Raymond Hernandezs report in todays New York Times makes this abundantly clear. Liberals, progressives, centrists and Democrats need to decide how they plan to approach this. But lets make one thing clear—pressure will have to be brought to bear on the nations major news orgs. They cant be allowed to channel these crazies as they did in the endless years of the Whitewater pseudo-scandals. Nor can they be allowed to conduct a war, as they did against Candidate Gore during Campaign 2000. And by the way—what do the American Prospect, the Washington Monthly and the New Republic plan to do this time? These fiery liberals ran and hid during a decade of Clinton-Gore pseudo-scandals. Trust us: The crazies are coming for Hillary Clinton. And these fiery liberals will play dumb again—unless you start assailing them now.

HOW TO CUT THE CRAP: Yes, this is the semantic dispute which actually makes a big difference. And yes, a semantic war is coming. Morton Kondracke peddled the piffle on Special Report just last night:

KONDRACKE (5/2/05): [Senator Leahy] talks about benefit cuts, and in fact, they are reductions of increases.

There are no benefit cuts in Bushs plan. By contrast, Bush has proposed increases. Moments later, a certain shrink reinforced Morts misleading claim:

KRAUTHAMMER: [Democrats] say the Republicans want a cut, as you had in the headlines. Disingenuous, but nonetheless, want to cut your benefits.

Would Bushs plan cut SS benefits? Or would everyone get an increase? This semantic dispute really counts. And Dems have to know how to play it.

Having said that, and with massive respect to Paul Krugman—the massive respect he has massively earned—we dont think his Monday column used the most effective construction. The New York Times adopts his construction in todays editorial:

NEW YORK TIMES EDITORIAL (5/3/05): Mr. Bush says these cuts would enable the system to continue paying benefits at the current level to the 30 percent of recipients who now make less than $20,000. But fully two-thirds of retirees rely on Social Security for more than half of their income. Moreover, the Bush plan gives the false impression that the wealthiest beneficiaries would bear the most pain. That's not the case. The wealthier one is, the lower the percentage of retirement income coming from Social Security, so even a big cut has little impact. By 2075, an average worker's benefit cut would equal 10 percent of pre-retirement income; a millionaire's reduction would be only 1 percent.

That may be true, but its tortured, and hard to follow—and therefore, its easy to argue against. Replacement rate is the construction Dems should use to explain how Bushs proposal really works. Heres what the Times editorial should have said:

REVISED EDITORIAL: Mr. Bush says these cuts would enable the system to continue paying benefits at the current level to the 30 percent of recipients who now make less than $20,000. But even if that turns out to be true, all other groups will have their benefits cut—by substantial amounts. At present, for example, a worker at the upper end of the middle class may get as much as 42 percent of his income replaced by his Social Security check. But this would change under Bushs plan. By the year 2061, such a worker would only get 22 percent of his income replaced. By 2075, this worker is down to 12 percent. Simply put, this would change the face of middle-class retirement.

For the record, an average-income worker goes from 36 percent replacement now to 26 percent in 2075. Would Kondracke and Krauthammer describe these changes as increases? Whatever you call it, these are the data that help people see how the Bush plan actually works. (We have taken all our numbers from Times reports in the past week.)

Replacement rate is the way to go in showing what this proposal does. When the hacks say that everyone gets an increase, this is the simple way to counter. Everything else just breeds confusion. Dems need to get on this plan.

PELOSIPALOOZA: How incoherent was Nancy Pelosi on ABCs This Week this Sunday? The House Dem leader was hugely incoherent. To understand how bad it was, lets make sure we know what has to be done to solve Social Securitys solvency problem.

Heres the nutshell: According to the SS trustees, Social Security wont bring in enough money in the next 75 years to pay all promised benefits. Yes, payroll taxes will keep rolling in—but they wont be enough. Over the course of that 75 years, the system will need an extra $3.7 trillion to meet all current promises. If we accept the trustees projection, Dems must cut benefits—or find new revenue—to match that now-iconic amount. (Note: According to the current CBO projection, the revenue shortfall will be substantially smaller—around $2 trillion. This point is very important, as we note below.)

So how would Dems make up that shortfall? Would they cut benefits? Would they raise taxes? On Meet the Press, Chris Dodd was asked that question. And as we noted yesterday, he seemed to say he would pump in new revenue:

DODD (5/1/05): This is a solvency issue, and there are ways of solving the solvency issue, in my view, without having to get into benefit cuts. Simply if you would just take what the president suggested in 2001 for his tax cuts, which were not to be permanent but to expire within 10 years. If he would not make those permanent, those tax cuts will amount to about $11 trillion in revenue losses over the next 75 years. The solvency issue for the Social Security Trust Fund is around $3 trillion. Just reduce that tax cut by $3 trillion, keep $8 trillion if you want. That solves the solvency problem without cutting benefits at all.

Dodd accepts the SS trustees projection. So how would he erase that $3.7 trillion shortfall? He suggested that he would look for new revenue—that you could solve the solvency problem without cutting benefits at all. There are further questions to be asked about this. (Is Dodd saying that we should use general revenues to supplement the payroll tax?) But Dodds answer made sense, and was perfectly clear. I would look for new revenue, he said. We could do this without cutting benefits.

Dodds remarks were fully coherent. Then we get to Leader Pelosi, flailing away on This Week. Citing the CBOs less gloomy projection, Pelosi said the problem really begins around 2050. Reasonably enough, George Stephanopoulos asked her what shed do then—and thats when the chaos started:

STEPHANOPOULOS (5/1/05): So what do you do about the cuts that will happen in, you say, 2050? The Social Security administration says 2042.

PELOSI: Well, okay, well, again, you stipulate to the same set of facts. In any case it's 35 years from now. We have time to do it right. And the Democrats are very proud of, they have been willing to take the heat to keep the focus on what the president is proposing and what the president is proposing is really an assault on the middle class. I don't know what the middle class ever did to President Bush but he has it in for them. He has a situation where he suggests, he puts forth privatization which will take $5 trillion out of the Social Security trust fund hurting the solvency of Social Security and the ability to pay benefits. Next he goes to West Virginia to the Center for the National Debt and says, there's no there there when it comes to the Social Security trust fund. Not true. There is a there there, to the tune of trillions of dollars if the president would only pay Social Security back the money it borrowed from it as President Bush did—excuse me, as President Clinton did when he was president. Third now, the president is saying that he is going to have a sliding scale of how benefits now are provided. Now, if you make an average of $58,000 in your life, solidly middle class, you will get a 42 percent cut in your Social Security benefit. That's just not fair.

We have time to do it right, she said—but what does Pelosi want to do right? After reading that presentation, we dont have the slightest idea. Indeed, if you think her spiel is hard to follow, well assure you—youre not alone. But heres the principal problem: Pelosi berated Bushs plan for private accounts, and she seems to worry that Bush may not pay back the money which has been borrowed from the Social Security trust fund. But that isnt relevant to the question she was asked; it isnt relevant to the question of how Dems would address the projected SS shortfall. When the trustees project a $3.7 trillion shortfall, they are assuming that the money borrowed from SS will be paid back—that the trust funds treasury notes will be honored. The $3.7 trillion shortfall is in addition to that! Pelosi hadnt addressed the question. So Stephanopoulos kept trying:

PELOSI: Democrats are—have a vision to save Social Security first.

STEPHANOPOULOS: But nobody has seen it.

PELOSI: No, save Social Security first. Pay the trust fund back the money that the president has taken from the trust fund. President Clinton did. He paid money back.

But pay[ing] the trust fund back has nothing to do with making up the projected shortfall—the shortfall Dodd directly addressed. But uh-oh! In the face of Pelosis confusion, indefatigable Stephanopoulos began to fail and falter:

STEPHANOPOULOS (continuing directly): Okay, then let's stop right there then. How do you pay that money back? Where are you going to get that from?

But it doesnt matter how Pelosi would pay back the trust fund. (For the record, the trust fund will be paid back the way all such debts are paid back). What matters is how Pelosi addressed the shortfall which is projected to occur after that. But by now, Pelosi had her host in the weeds. From deep in the weeds, she responded:

PELOSI (continuing directly): Well, first, you have to stop deficit spending. Democrats have advocated pay as you go. We did that in the '90s. We had surpluses. We paid the trust fund back. You can't bleed the trust fund of its money by having deficit spending giving tax cuts to the highest income people in our country at the expense of the trust fund.

In a word, thats a mish-mosh. Dodd had given a simple answer to the simple question involved here. But Pelosi was wandering off in the wilderness. Stephanopoulos tried to prod her back onto the trail. But Leader Pelosi was lost:

PELOSI: I'm setting up the—why there is a problem. Secondly, you can't take the money with no intention of paying it back. When President Reagan and Speaker O'Neill went to the table they established a robust trust fund that would keep us, this trust fund solvent and pay full benefits until the middle of the 21st century. Take whichever date you want. This proposal that the president put forth on Friday is an assault on the middle class, a guaranteed stream of income for them will now be reduced. The president says we're helping lower income people more. No, lower income people are, excuse me, are treated the same.

Lets say it straight—Democrats should be appalled, insulted, enraged, dismayed, to suffer this kind of representation. This chaotic conversation went on and on (text below)—but Pelosi was inept, unprepared.

In closing, lets make one important point about the way Dems might approach this.

This whole discussion starts with a forecast—the forecast of the SS trustees, who say that there will be a $3.7 trillion shortfall over 75 years. But Dems are under no obligation to accept this gloomy projection. Indeed, at the start of her session with Stephanopoulos, Pelosi rejected this gloomy forecast; she said she preferred the CBO forecast, under which the problem doesnt begin until 2052. But as is typical of her work on this subject, Pelosi failed to make an obvious connection. If the CBO forecast is the one we use, the projected shortfall is only $2 trillion. But according to conventional accounts, the Pozen plan which Bush is pimping cuts benefits by $3 trillion during that time-span. In other words, Bush is massively slashing benefits to stem a shortfall which may not even exist. If Pelosi prefers the CBO forecast, Bush is cutting benefits by 50 percent more than is needed to achieve budget balance.

For ourselves, wed very much like to see Big Dems discuss that CBO forecast. But uh-oh! This party just cant get its stories straight. On Meet the Press, Dodd gave a coherent reply to the basic question—but he insisted, completely falsely, that every single actuary agrees with the gloomy SS forecast. And even as he was making this claim, Pelosi was saying precisely the opposite over on ABC. But Pelosi, preferring the CBO forecast, failed to note that the CBO projects a substantially smaller shortfall. This is the gang that cant talk straight—even when straight-talk suits their purpose.

Readers, your Dem Party leaders have been hopeless for months in discussing Social Security. Yesterday, Matt Yglezias correctly noted a minor problem with one part of Stephanopoulos presentation. But this has ceased to be a press problem. It would be wrong to pretend that the problem this Sunday stemmed from Stephanopoulos work. Its clear where the current problem starts. It starts with Pelosi—and with Dodd.

WHOS ON FIRST: Embarrassing—theres no other word for it. The conversation wandered on (and on), like something from the vaudeville stage. Abbott and Costello looked on from Olympus—and felt they were due major royalties:

STEPHANOPOULOS: So you're saying repeal the tax cuts?

PELOSI: I'm setting up the, why there is a problem. Secondly, you can't take the money with no intention of paying it back. When President Reagan and Speaker O'Neill went to the table they established a robust trust fund that would keep us, this trust fund solvent and pay full benefits until the middle of the 21st century. Take whichever date you want. This proposal that the president put forth on Friday is an assault on the middle class, a guaranteed stream of income for them will now be reduced. The president says we're helping lower income people more. No, lower income people are, excuse me, are treated the same.

STEPHANOPOULOS: But it's still a better deal than doing nothing. And the Democrats still haven't come forward with a plan.

STEPHANOPOULOS: Again, how? That's what I'm just looking for. What are the ideas?

PELOSI: How is it, how is it, pay as you go is how.

STEPHANOPOULOS: How is what's important and the question is why should American people trust the Democrats if you don't have a specific plan?

PELOSI: The American people should trust the Democrats because we originated Social Security. This was a very entrepreneurial idea of the New Deal and Democrats will not allow the Republicans to turn this great deal for the American people into a raw deal for them by what they are proposing. They've never really supported Social Security, and the way to damage it, I'm trying to select my word carefully, is to destroy the universality of it. The genius of Social Security at the time was that everybody supported it in terms of the working families of America because they got a stream of income commensurate to what they put into the program. Now we have a situation where the president says, you pay every paycheck into Social Security and instead of getting a commensurate value as a retirement guaranteed benefit, we're going to have a sliding scale so if you're in the middle class, you make an average of $58,000 over a lifetime you get a 42 percent cut. It's just not right.

STEPHANOPOULOS: I understand the critique of the president's plan. I understand the defense of Social Security, but why the reluctance to come forward with a specific plan that would show how you would get Social Security to solvency?

PELOSI: Well, you're not listening then, because what I'm saying to you is that you have to stop deficit spending which is taking the money out of Social Security. Privatization of itself will take $5 trillion, $5 trillion out of the trust fund. That's a huge amount of money. Deficit spending, borrowing the money without the intention to pay it back with interest, which is the law, now, if the president does not intend to pay Social Security back, he has to pass a law to say we will not pay Social Security back.

STEPHANOPOULOS: But even if you take private accounts, personal accounts off the table you still have a $3 to $4 trillion hole over the next 75 years. How do Democrats propose to make that up?

PELOSI: Well, first of all, what you have to do is stop taking money out of Social Security without the intention of paying it back. And then as we have said to the president over and over again, let us go to the table in a bipartisan way and consider all of the options.

Every Dem should be enraged to read this appalling transcript.

TOMORROW: Defining dishonesty down, part deux. By the way: Fiery liberal Richard Cohen jumps on the Kinsley bandwagon today, praising Bush for the high-minded way he is trying to address a real problem. More on this to come.